Banks are not in a hurry to offer financing for the purchase of housing at affordable prices. Therefore, sellers and buyers of real estate have to compromise when choosing the methods and ways of getting the coveted square meters in installments. In this article we will briefly deal about the peculiarities of lending after the crisis, say, on that note, analyzing the proposal developers.
Before the beginning of the crisis in the crediting market unconditional superiority held banks. The scheme was a pretty simple:
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• the buyer of the real estate (aka the borrower) submitted the documents to the Bank;
• the Bank took a decision on lending and transferred the money directly to the developer;
• the buyer signed the contract of purchase and sale of real estate or buying property rights, less investment agreement - if the house is not yet finished).
Today, the picture is quite different. Developers are forced to refuse to cooperate with the banks for lending to its customers. The result is often the buyer and the developer are not alone in negotiations on installment. On the one hand this is good - practice, you can often negotiate the terms of the purchase even better than it is written in the prospectus, there is no financial institution (Bank), which establishes additional interest, wanting to earn on lending, the Bank can give credit to the developer himself, however, this right does not affect the agreement between the developer and the final buyer of housing). On the other hand, in the absence of a financial institution (Bank), the developer completely free in choosing the installment.
As a result of today's market is full of offers developers of instalments. Varieties installments directly depend on the organization of financing of construction. Below we briefly describe the most common schemes, may encounter a buyer - point to their main advantages and disadvantages from the point of view of the buyer.
Participation in construction cooperative. Quite widespread were cooperatives. The phrase «housing cooperative familiar from the Soviet times. Procedure of financing is that the buyer of real estate contributes to the cooperative. On completion, the buyer will exchange equity participation to a specific apartment in an apartment house or a residential complex (in these cases, the most frequently used housing cooperatives).
The disadvantages of installment payment when buying housing in a cooperative should include a significantly higher amount of the Deposit, if the contribution is broken (in installments). This increased cost and are installment cost, similar interest. For comparison housing cooperatives time of the USSR did not anticipate higher costs also hold back this and advertising brochures. The word brochures often indicate minimal cost of housing, of course excluding installments. Another important factor to be noted that the buyer makes a payment not for square meters, and only for private limited participation in the cooperative. In the future this share participation will be exchanged for an apartment, but only when the apartment is finished.
Preliminary agreements. The preliminary contract is the most simple solution for selling apartments in installments. The buyer and the Builder shall agree to conclude a contract of purchase and sale of apartments in the future (when the apartment is finished). In this case, the payment schedule. At default of the payment schedule, the developer can generally terminate the contract and return the money to the buyer (all or none is specified in the contract). Preliminary agreements is most often used when selling apartments in installments in small homes, cottages and townhouses. Pay attention to the fact shall be certified whether the preliminary contract by a notary is mandatory requirements under the laws of Ukraine (in case, if the contract is not signed by the notary form - get money, or shelter can be extremely difficult).
Investment treaties. The investment agreement is a fairly common today kind of completing the purchase of unfinished housing. And this despite the legislative ban on the use of such contracts (Law of Ukraine on investment prescribes the use of the FSF/BACKGROUND, as written below). However, the investment agreement allows the flexibility to describe the payment schedule, especially if you intend installment sale. This factor explains the extreme popularity of this type of contracts, despite the legislative restrictions - they still enjoy and large eminent developers, and vendors of townhouses. We recommend caution in the signing of investment agreements, especially, if the speech goes about buying a home.
Bonds, or other securities. Many developers offer buyers of real estate to buy this or other securities (bonds) and subsequently exchange them for square meters in an apartment or residential building. Payment for the securities is made parts, that is, in installments. The cost paid in several installments higher than if you buy the full payment.
On the one hand, the legislation of Ukraine commits to sell the apartment is through co-investment institutes, namely through their kind - CFF or BACKGROUND. FSF/BACKGROUND sells bonds that will need to be exchanged on the square footage of the apartment, most often on the principle of one bond for one meter. The disadvantage of this funding scheme is that when exchanging the developer will require to sign a document (certificate of acceptance), on which the buyer will not have claims to quality of construction. In addition, at the time of the exchange a buyer will fully pay for the notes. Otherwise, the right of ownership to the apartment is not passed to the buyer and will not be properly recorded (certificate of right of ownership to the buyer's name).
Regardless of the choice of the scheme of purchase of habitation, as well as the proposed scheme installment, you can protect yourself from losing money by conducting complex inspections:
• construction customer (developer) is the person (usually a company LLC, private enterprise, joint stock company, which has the rights to land for construction. Demand to provide the document on land - often land lease contract or a deed of ownership;
• in the vast majority of cases, the buyer would make the contract and gives the money) not with a construction customer and the third party. It is critical to understand the relationship between the recipient of your money and construction customer;
• construction at all stages of the project before the adoption of the operation is quite a complicated process. However, do not be afraid of difficulties and independently analyze the project plans of apartments and floors. Maybe you can find discrepancies with advertising booklets. This also applies to the apartments (price of the missing square meters are extremely difficult to get back from the developer), and improvement elements around the houses (the number of Parking lots, playgrounds, fountains and flowerbeds with front gardens); and
• none of the existing schemes for the construction and sale of unfinished houses cannot guarantee the sale of one apartment to several buyers. The more attention you pay the question of the analysis of what you buy, the less you will have the chance to be in the ranks of the cheated customers who have given their blood for air, even in installments.
Hope the above information will help you understand the elements of real estate. If you are still willing to invest in housing consult with a professional, just the same as you would be done when buying a car with hands. Because minesweeper makes a mistake only once, but many times you are ready to burn yourself when buying a home for yourself and your family?
Kirill Левтеров Lawyer, WMD